Open radio access network (RAN) hardware and software will near 10% of the total RAN market and surpass $5 billion in cumulative revenue during the next five years, according to a new report from Dell’Oro Group. 

Sales of virtualized open RAN basebands and radios, including software and firmware, will capture less than 1% of the RAN market this year. The double-digital annual growth rates predicted by Dell’Oro Group are being fueled by various factors, including a politically-motivated trade war that generally positions open RAN as an alternative to Chinese-made equipment. 

“Momentum is improving, and we have adjusted the outlook upward to reflect a confluence of factors including promising results from initial commercial deployments, growing support from incumbent RAN suppliers, and increased geopolitical uncertainty acting as a catalyst for operators to rethink their supplier strategies,” Stefan Pongratz, VP at Dell’Oro Group, said in a statement. 

Indeed, the firm is including some of the incumbent RAN vendors in its open RAN projection because three of the top five RAN stalwarts have, to varying degrees, indicated they will support some aspects of open RAN. Pongratz describes this as “partial open RAN,” meaning that some components will be virtualized and open, but don’t adhere to multi-vendor frameworks. 

"We do project that 'partial open RAN' will drive the majority of the open RAN capex throughout the forecast period," he told SDxCentral.

Nokia, which is uniquely challenged among its peers, has been one of the most vocal proponents of this shift. The vendor earlier this summer said forthcoming updates to its 5G RAN portfolio will include a virtualized distributed unit, a disaggregated 5G base station, and a fronthaul gateway that adheres to cloud-native principles. 

Multiple features, however, will remain baked in to Nokia’s equipment, according to Timon Sloane, VP of marketing at the Open Networking Foundation (ONF). The group is steering resources to open the RAN through a new project because the O-RAN Alliance, under growing influence from RAN vendors, is falling short in fulfilling its original vision. 

Open RAN is gaining momentum, according to Dell’Oro Group, as the strength of the top three incumbent RAN vendors has never been higher. Global revenue shares of the three leading vendors grew from about 55% in 2001 to roughly 75% in 2019, the firm said. 

“With few signs that these revenue share trends are about to reverse anytime soon, open RAN is increasingly seen as a possible solution to address reliance on the top three and/or to simplify swaps in the event that further consolidation becomes a reality down the road,” Pongratz wrote in a blog post. 

Shipments of open RAN macro radios will surpass a cumulative 1 million units through 2024, according to Dell'Oro Group. "Greenfield will dominate initially, but brownfield deployments are projected to comprise a growing share of the cumulative 2019-2024 open RAN market," Pongratz wrote in response to questions.

"Given that the open RAN radio installed base is in the 10,000 to 50,000 range today, clearly it is still early days," he said.

The firm assumes that North America and the Asia-Pacific region will dominate greenfield open RAN deployments, largely through Dish Network and Rakuten. Meanwhile, it expects European operators to be market leaders in integrating open RAN with existing networks.

Progress on full virtualization efforts is also contributing to the rise of open RAN as multiple suppliers have commercialized offerings consisting of virtualized central units and distributed units, Pongratz explained. This, the research firm claims, coupled with policies intended to stimulate the open RAN market and growing interest among operators is creating an improved outlook for open RAN at large.